Tata Motors to give Rs 4,000-cr investment push to car, truck sales

Tata Motors will invest more than Rs 4,000 crore to boost sales of its passenger and commercial vehicles, its chief executive said on Monday, as the Indian automaker looks to return to profit in its domestic business, according to a PTI report.

Tata Motors, which owns the luxury Jaguar Land Rover (JLR) brand, has committed to invest Rs 2,500 crore in its passenger vehicles unit, and will pump in more than Rs 1,500 crore in its commercial vehicles business this year and annually over the coming years, Chief Executive Guenter Butschek told reporters in Mumbai.

The firm has been trying to turn around its lossmaking domestic unit by modernising products, improving efficiency, cutting costs and streamlining its organisation and supplier base. The company's proposed collaboration with Volkswagen Group/Skoda was expected to help it prune costs and derive greater economies of scale.

In an interview to the Economic Times, Butschek said that the Volkswagen (VW) deal was intended to leverage its advance modular platform with volumes coming from the partner. Another motivation behind the deal was access to new technologies like the Advanced Modular Platform (AMP).

Similar in concept to VW's MQB, the AMP is made up of 15 individual modules that can be put together to form a complete car. The size is variable as well. The first car off this next-generation platform was planned to be in showrooms by 2018 with up to eight individual models produced on this platform.

The list of AMP-based models would have included hatchbacks, sedans, people movers and SUVs. Tata had said that the commonality between the parts would be as high as 80 percent, and the platform would be able to accept both three-and four-cylinder engines with both automatic and manual gear boxes.

Butschek did not clearly specify reasons for the deal with Volkswagen/Skoda not coming through. "It is a legitimate question, but I do not have an immediate answer. We have just realigned our team, put special focus on our team on AMP and the first AMP platform based model to be launched in 2019. We are also continuously seeking further opportunities to find a partner because the key objectives of a potential collaboration are economies of scale and access to technology," Butschek said.

On whether Tata Motors would deepen its collaboration plans with JLR, Butschek said that the company's next platform is one where it would collaborate with JLR on building a five-seater SUV, and a seven-seater version slated to be launched by mid-2019.